Detailed Case Study

Detailed Case Study

Butler-Johnson Corporation | $7.75 Million, Financing

Client

Headquartered in San Jose, CA, Butler-Johnson Corporation (“BJC”) is a wholesale distributor of quality branded flooring, countertops, tile, natural stone, and other interior surfacing products. The company sells primarily to retailers, small manufacturers, and fabricators in the Northern California and Northwestern Nevada region. Established in 1960, the company is an exclusive distributor for DuPont and Mannington Mills in Northern California.

Scenario

BJC wished to take full advantage of upcoming commercial opportunities for expansion, but like many small businesses, the company was locked in an inappropriate financing structure that was hampering growth. Hoping to refinance an existing line of credit, as well as to secure additional working capital to support expansion, BJC approached US Capital Partners for assistance.

Solution

US Capital Partners successfully arranged a $7 million line of credit for BJC, as well as a $750,000 new term loan to fund further growth. Serving as lead arranger, US Capital Partners achieved this by helping to refinance BJC’s accounts receivable and inventory line of credit facility and increasing its accounts receivable and inventory line of credit availability. The $7.75 million in financing arranged by US Capital Partners was specifically designed to support BJC’s plans for ongoing expansion.

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Optimus EMR™, Inc. | Multi-Million Dollar Financing

Client

Optimus EMR™, Inc. ("Optimus") is a leading provider of clinical content and electronic medical records software. Founded in 2000 and headquartered in Irvine, CA, the company is leading the transformation of electronic medical records, point-of-care data collection, workflow automation, and full implementation partnership for post-acute care. Optimus offers the Optimus EMR system, the most advanced electronic health record system for the post-acute care market.

Scenario

Having developed outstanding clinical and EMR software solutions, Optimus needed further financing to support its expansion plans. Additional growth capital would allow the company to market its products more aggressively across the US, with the aim of gaining significant market share in its growing industry. The company was also looking to refinance its existing working capital line of credit, and turned to US Capital Partners for help.

Solution

US Capital Partners successfully secured a new multi-million dollar credit facility for Optimus. The new facility served to refinance the company’s existing line of credit and to support its expansion plans. Part of the new financing was provided by Breakwater Investment Management, LLC, a private investment firm that specializes in direct investments in small to lower middle market growth businesses. US Capital Partners, LLC is a division of Breakwater Investment Management, LLC.

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Consensus Orthopedics, Inc. | $8 Million, Financing

Client

Founded in 1992, Consensus Orthopedics, Inc. ("Consensus") is a leading designer and manufacturer of high-quality reconstructive total joint implants for the hip and knee in the United States and international markets. Headquartered in El Dorado Hills, CA, Consensus sells its products throughout North America, Western Europe, Turkey, China, Japan, Australia, and New Zealand.

Scenario

Since 2005, US Capital Partners has been arranging financing for Consensus and improving the company’s access to capital. US Capital Partners has also been able to provide direct financing for this rapidly growing world-class business, through the Breakwater Structured Growth Opportunities Fund. In 2011, as Consensus continued to expand, it was necessary to secure additional growth capital for the business, and also to consolidate and improve its existing financial structure.

Solution

Serving as sole arranger, US Capital Partners successfully secured an $8 million credit facility for Consensus. The financing comprised a revolving line of credit for both domestic and international assets along with growth capital term loans. Consensus will use the new facility to support its ongoing domestic and international expansion.

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Emerging Sports Nutrition Company | Financing by Breakwater

Client

Founded in 2002, this innovative sports nutrition company develops, markets, and distributes clinically tested nutritional products for weight loss and enhanced performance in sports. The company distributes its products to thousands of retail stores in North America and abroad through GNC, Wal-Mart, Rite-Aid, 7-Eleven, and other Fortune 500 players.

Scenario

Rated as one of top 250 fastest-growing privately held companies in its State, this sports nutrition company needed additional growth financing to hire new staff and support its sales and marketing initiatives in the United States and abroad.

Solution

Breakwater Investment Management, LLC ("Breakwater") financed this emerging sports nutrition company out of its Breakwater Structured Growth Opportunities Fund. US Capital Partners is a division of Breakwater, a private investment firm that specializes in direct investments in small to lower middle-market growth businesses. The financing marked the first institutional private round of financing for this emerging sports nutrition company, and will be used to support the company's domestic and international expansion.

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Leading Edge Communications, Inc. | $1.75 Million, Financing

Client

Established in 2000, Leading Edge Communications, Inc. ("LEC") is a growing Nevada-based telecommunications service provider. The company provides telecommunication support and services to four domestic and international full-service call centers. LEC's call center customers are primarily international retailers. LEC helps these retailers manage inbound traffic and provide customer support for their clients.

Scenario

LEC recognized an opportunity to diversify its income stream by becoming a wholesale telecommunications carrier and service provider. Having invested in the necessary technology and infrastructure, LEC required additional working capital to take advantage of the opportunity. The company turned to US Capital Partners for help.

Solution

Although LEC was bringing out a new product line, US Capital Partners was able to arrange a scalable $1 million line of credit and an additional $750,000 term loan to support LEC's growth. US Capital Partners was able to secure this financing for LEC by providing an objective third-party analysis and evaluation of the historical financial performance of the company, the experience of the management team, the credit of its customers, and the growth potential of the business.

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SpecPrint | $2.8 Million, Refinancing

Client

SpecPrint is a family-run custom printing and manufacturing business headquartered in Mt. Juliet, Tennessee. The company specializes in printing labels for manufacturers of power equipment and appliances. It also produces a wide range of other custom products, including graphic overlays, decals and nameplates, and specialty die-cut components.

Scenario

SpecPrint's lender was looking to exit because the business had suffered declining sales and was operating in a criticized industry, printing. SpecPrint needed refinancing quickly to retire its existing line of credit and term loan with the bank, as well as to provide working capital for the business. Failure to refinance promptly would lead to foreclosure.

Solution

US Capital Partners helped engineer a $2.8 million refinancing for SpecPrint. We evaluated the collateral coverage and financial performance of the company, and helped arrange a partial take-out of the bank at a significant discount. SpecPrint is now in a stronger position with lower debt on its balance sheet, a better relationship with a new lender, and a business that has managed to retain its employees and is again working towards growth.

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Consensus Orthopedics, Inc. | $5 Million, Financing

Client

Founded in 1992, Consensus Orthopedics, Inc. (“Consensus”) is a leading designer and manufacturer of high-quality reconstructive total joint implants for the hip and knee in the United States and international markets. Headquartered in El Dorado Hills, CA, Consensus sells its products throughout North America, Western Europe, Turkey, Japan, and Australia.

Scenario

Consensus had been growing its business rapidly, both in the United States and abroad. In February 2011, for instance, Consensus entered into an exclusive partnership with Kanghui Holdings (NYSE: KH), a leader in China's orthopedics sector, to manufacture and market a series of joint implant products in China and other international markets. To support its rapid expansion, Consensus needed to renegotiate its credit facility to reduce interests costs and eliminate working capital constraints.

Solution

US Capital Partners initiated negotiations with Consensus's lender, and was able successfully to secure a $5 million senior secured credit facility for Consensus. The renegotiated facility arranged by US Capital Partners included a decrease in the interest rate, as well as an increase in both the AR line of credit for domestic receivables and the inventory line of credit. The renegotiated facility was designed to support Consensus's growth plans.

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Steven Counts, Inc. | $4 Million, Refinancing

Client

Established in 2000, Steven Counts is a Florida landsite development company with extensive experience in the heavy construction industry. The company's activities encompass asphalt paving and production, aggregate mining and processing, concrete block and ready-mix manufacturing, and full-service site development with in-house estimating and surveying.

Scenario

Having survived and grown out of the “Great Recession,” Steven Counts had plans for renewed expansion in line with the recovery of Florida's infrastructure and construction industry. The difficulty was that the company's lines of credit were capped and had no growth potential. Steven Counts approached US Capital Partners for help.

Solution

US Capital Partners successfully arranged a $4 million senior secured credit facility for Steven Counts. The new facility was designed to retire Steven Counts's existing term loans with the bank. It provided significant cash at close, after paying the bank out in full, together with additional borrowing availability to allow Steven Counts to continue growing.

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Consumer Retail Beverage Company | $6 Million, Financing

Client

Headquartered in Chicago, Illinois, this thriving consumer retail beverage company sells its brands in 47 states through a diverse mix of distributors. Founded in 2005, the company has become one of the fastest-growing consumer retail beverage manufacturers in the United States.

Scenario

The existing line of credit of this rapidly expanding beverage company was unscalable and inadequate. Consequently, working capital constraints were hampering the company's domestic growth. The company sought out US Capital Partners to arrange a line of credit that was scalable to match the ongoing expansion of the business.

Solution

US Capital Partners arranged a $6 million senior secured credit facility for the company. Working with its affiliates, US Capital Partners not only helped refinance the company's exiting line of credit but also successfully arranged long-term, scalable financing beyond the traditional banks' capabilities. The new credit facility included an accounts receivable and inventory line of credit on the company's domestic assets. It served to eliminate working capital constraints and support the company's ongoing domestic growth.

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International Produce Supplier | $7 Million, Advisory

Client

Founded 25 years ago, this California-based company is an international produce supplier and agricultural produce shipper. With production strategically located across the US, Mexico, and Central America, the business is able to meet increasing customer demand for year-round produce supplies. The company supplies major retailers, wholesalers, and distributors in North America.

Scenario

Following one or two weak harvest years, the company suffered a dip in earnings and cash flow. This coincided with the company's bank becoming severely weakened during the economic downturn. Faced with liquidity issues, the bank was no longer able to provide the seasonal "over-advance" it had made available to the company for the past 10 years to accommodate the seasonal nature of the business. Now unable to pay its vendors, the company was under serious financial pressure, which triggered a bank workout.

Solution

US Capital Partners engineered a workout plan for the company, and was able to negotiate a successful exit from the bank at 100% debt payout. US Capital Partners also arranged additional financing options for the company. The company executed on the workout arrangement and secured $7 million of debt financing for itself.

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Imagenetix, Inc. | $1.5 Million, Financing

Client

Imagenetix is a California-based public company traded on NASDAQ (Symbol: IAGX). Headquartered in San Diego, the company is a growing innovator of scientifically tested, proprietary bioceutical products. It develops, formulates and markets natural-based, over-the-counter skincare products, topical creams, and nutritional supplements.

Scenario

Imagenetix was being hindered by working capital constraints. To support its ongoing expansion, the company approached US Capital Partners for a working capital line of credit. The challenge for US Capital Partners was to arrange suitable financing for Imagenetix despite the company's AR and inventory collateral possessing some retail credit risk.

Solution

Serving as sole arranger, US Capital was able to successfully arrange a $1.5 million senior secured credit facility for Imagenetix. This included an AR and inventory line of credit, which maximized Imagenetix's borrowing eligibility and provided the company with the liquidity it needed. US Capital has particular expertise in underwriting AR and inventory collateral that possesses retail credit risk.

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Transport Agent Grid, LP | $1.5 Million, Financing

Client

Transportation Agent Grid, LP ("TAG") is a growing operations and logistics resource business for California-based independently-owned local and regional on-call delivery companies. TAG is headquartered in Newark, CA.

Scenario

TAG needed additional financing to expand its operations to Seattle and Chicago. However, TAG's previous lenders were unable to finance the partnership's trade receivables. To support its ongoing domestic growth, TAG needed to move its financing from a term-loan structure to a revolving line of credit based on its trade accounts receivable.

Solution

Through a careful analysis of TAG's collateral base, US Capital Partners was able to understand TAG's trade receivables from a credit perspective. This made it possible for US Capital Partners to bring in lenders under a new, improved structure. Working with its affiliates, US Capital Partners secured a $1.5 million senior secured credit facility for TAG. The new credit facility served to refinance TAG's previous line of credit and to finance its receivables.

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Speculative Product Design, Inc. | $4.5 Million, Refinancing

Client

Speculative Product Design, Inc. ("Speck") is a leading designer and manufacturer of electronic accessories. Headquartered in Palo Alto, CA, Speck is best-known for creating refreshing designs that offer quality, thoughtful features, and distinctive style. Its line of products can be found worldwide at Apple retail stores and at most major electronics dealers.

Scenario

Speck wanted to capitalize on upcoming commercial growth opportunities, but needed financing that was affordable and intelligently structured. Speck's lender was deleveraging the inventory financing available to the company and was unable to provide additional funds. Speck was therefore looking to refinance its line of credit and increase its borrowing availability, to support the company's continued domestic and international growth.

Solution

Serving as lead arranger, US Capital Partners was able to arrange a $4.5 million senior secured credit facility for Speck. The credit facility served to refinance Speck's previous line of credit, and included an inventory revolver and an AR line of credit for both domestic and international assets. Working with its many affiliates, US Capital Partners successfully structured and arranged an optimal financing arrangement for Speck.

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Southwestern Security Product Company | $1 Million, Financing

Client

This southwestern security product company designs and manufactures "knowledge-based" synthetic armor products for the military, police, and commercial sectors globally. Its range of products include body armor, vehicle armor, aircraft armor, energy asset protection, and infrastructure protection.

Scenario

This company was in cash-burn mode, sales were low, and key contracts had to be fulfilled, but there was insufficient working capital to finance the manufacturing to fulfill purchase orders. The company had fixed assets (equipment) and accounts receivable, but the fixed assets were not financeable by its regional bank and the accounts receivable had concentration issues and were foreign.

Solution

US Capital Partners was able to collateralize both the equipment, at auction values, and the foreign and domestic receivables. Working with its Illinois- and Florida-based lender affiliates, US Capital Partners was able to successfully structure financing so that this company could fulfill its orders and continue its operations. The total capital provided to the company is $1 million, through a senior credit facility of $500,000 and a senior term loan of $500,000.

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Consensus Orthopedics, Inc | $4 Million, Refinancing

Client

Consensus Orthopedics, Inc. is a $15-million US-based medical artificial joint implant manufacturer with global distribution. It has been operating for 15 years, is professionally managed, and started becoming profitable in 2009.

Scenario

Consensus approached US Capital Partners for a structured equipment sale leaseback to provide working capital and to finance the acquisition of new equipment prior to becoming profitable. It also needed to refinance some of its existing debt and to secure a bridge to a new credit facility.

Solution

US Capital Partners has worked with Consensus over the past three years as an advisor, direct lender, co-lender, and sole arranger to secure over $4 million in additional capital for the company. US Capital Partners has refinanced the company's AR line of credit, provided an asset-based term loan, and funded a new inventory line of credit. US Capital Partners has also extensively advised Consensus on a recent $2 million equity raise and on new distribution relationships.

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A&E Engineering, Inc. | $2.35 Million, Acquisition

Client

A&E Engineering, Inc. is a profitable US manufacturer of precision aerospace parts and components. The company has been in operation for five years.

Scenario

A&E Engineering wanted to acquire a new manufacturing facility and new equipment for expansion. It also sought a sale leaseback and an accounts receivable line of credit for additional working capital.

Solution

US Capital Partners served as a direct lender, co-lender, and sole arranger for A&E Engineering, securing a total of $2.35 million for the company. US Capital Partners provided an equipment leasing line of credit, a sale leaseback of existing equipment, a new building acquisition term loan, and an accounts receivable line of credit.

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Bio Fuels Manufacturer | $24 Million, Financing

Client

This company was a highly promising bio fuels processor and distributor. It was a startup business with contributed plant and equipment.

Scenario

The start up required working capital to purchase initial raw materials, as well as growth financing to scale the business to $200 million. It approached US Capital Partners for a bridge loan to purchase materials, for an equipment sale leaseback for additional working capital, and for an accounts receivable line of credit to finance business growth.

Solution

US Capital Partners was able to provide the bridge loan, the equipment sale leaseback, and the accounts receivable line of credit. As a direct lender, co-lender, and sole arranger, US Capital Partners secured a total of $24 million for the company.

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